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The city of Zhengzhou, capital of central China’s Henan province, announced several adjustments to real estate policy, becoming the first provincial capital city to announce policy adjustments after China’s top leadership called for optimization of real estate policy based on new demand and supply dynamic in the housing market.
Zhengzhou will lower the minimum downpayment ratio for purchases of new homes with loans from the Housing Provident Fund to 20% and the ratio for purchases of second-hand homes will be lowered to 30%, the administration of the housing provident fund said on Friday.Â
The move is aimed at addressing housing issues for new city citizens and young people and better meeting people’s rigid home demand and the demand for improving housing condition, it said.
The came after the city’s housing authority on Thursday announced several measures to support the housing market, including providing deed tax subsidies for home purchases by young talents, home purchase subsidies to households with two or three children and deed tax subsidies for those who buy new homes in Zhengzhou in 2023.
In addition, the city removed the restrictions on home resales in a move to better meet demand to improve housing conditions, said the local authority. In the previous rules introduced in may 2017, properties were not allowed to be resold within three years of getting the certificate of title.
The authority will also encourage commercial bank to adjust the interest rates on existing home mortgage loans in an orderly and legal way and guide home mortgage rates and downpayment ratio lower, it said.
The measures came after the the Politburo of CPC Central Committee in a key policy meeting on July 25 said that China should adjust and optimize real estate policy at an appropriate time in response to the major changes in the demand and supply situation in the real estate market.
According to the official data released by the National Bureau of Statistics, Zhengzhou’s new home price index fell by 0.3% in July from the previous month and stayed in line with a year ago, while its second-hand home price index fell 0.8% month on month, down 4.7% from a year earlier.
Data from E-House China R&D Institute, Zhengzhou’s new home price index declined by 0.2% in May from the previous month, followed by a 0.3% drop in June.